FTSE 100 called up before UK inflation data

(Alliance News) - Stocks in London are set to open higher on Wednesday, ahead of UK data which is expected to show the rate of inflation has moved to within reach of the Bank of England's 2% target.

IG says futures indicate the FTSE 100 to open 14.1 points higher, 0.2%, at 8,430.55 on Wednesday. The index of London large-caps closed down 7.75 points, 0.1%, at 8,416.45 on Tuesday.

The pound was quoted at USD1.2710 early Wednesday in London, down slightly from USD1.2715 late Tuesday afternoon. The euro stood at USD1.0854, down ever-so-slightly from USD1.0856. Against the yen, the dollar bought JPY156.33, rising from JPY156.10.

According to FXStreet cited consensus, the rate of annual consumer price inflation in the UK is expected to have slowed markedly to 2.1% in April, from 3.2% in March.

Commerzbank analyst Michael Pfister said the reading is expected to be much cooler due to base effects, after a robust April 2023.

On the data, Pfister added: "This says little about new inflationary pressures. And here, as we have pointed out several times in recent months, the numbers tend to suggest that core inflation will settle in at slightly above 3%, which is still too high. The Bloomberg consensus for the core rate also does not expect today's figure to come in much lower. If that is ultimately the case, the BoE would have been well advised to be a little less dovish."

The UK data is reported at 0700 BST.

The Federal Reserve will also be in focus. Minutes from its most recent meeting are released at 1900 BST on Wednesday.

In Tokyo on Wednesday, the Nikkei 225 traded 0.9% lower in late dealings. The S&P/ASX 200 in Sydney was up 0.1%. In China, the Shanghai Composite was flat, while the Hang Seng in Hong Kong was 0.2% higher.

In New York on Tuesday, the Dow Jones Industrial Average closed up 0.2%. The S&P 500 added 0.3%, while the Nasdaq Composite climbed 0.2%.

Earnings from chipmaker Nvidia will also grab attention in New York. Nvidia shares closed up 0.6% on Tuesday, and surged 2.5% on Monday.

"Market sentiment remains cautiously optimistic ahead of Nvidia's earnings, with expectations for potential positive surprises tempered by concerns that the setup may mirror last year's performance, where the stock traded sideways for eight months despite consistent earnings beats. Regardless of the outcome, Nvidia's results could trigger some short-term and directional trades in both ways: up and down, as volatility is high on the implied stock expectations," ActivTrades analyst Anderson Alves commented.

Brent oil was quoted at USD82.22 a barrel early Wednesday, down from USD82.66 late Tuesday. Gold was quoted at USD2,414,01 an ounce, declining from USD2,425.40.

In Wednesday's UK corporate calendar, there are full year results from property investor British Land, retailer Marks & Spencer and utility Severn Trent.

By Eric Cunha, Alliance News news editor

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